DALLAS (CBSDFW.COM) – When you think of bingo – You might think of your sweet 80-year-old grandmother going to play bingo at a church down the street. It helps her pass the time and stay social.

But that’s not the kind of bingo hall our CBS 11 I-Team has been visiting. For months, our crew has been going undercover inside bingo halls in the Dallas area. The I-Team began their investigation after several non-profit organizations reached out for help, saying they were pushed to the brink of bankruptcy after playing charity bingo.

While investigating the way bingo halls are run in the State of Texas and who truly benefits from the millions of dollars the industry generates, the CBS 11 I-Team uncovered another issue. Our undercover cameras caught people playing inside bingo hall “game rooms” and getting paid in cash if they won.

The games we saw people playing look like high-tech slot machines or 8-liners. But the owners of the halls claim neither of those descriptions fit what they’re running. In fact, the owners say their game rooms are completely legal because they are actually sweepstakes rooms.

Undercover Camera Conversation:
Players Bingo Manager: “The only thing is we don’t give out the change. It stays on there.”
I-Team Reporter Mireya Villarreal: “Are you serious? So, I’m just going to win my $5 back? That’s it?
Players Bingo Manager: “I mean, you can go back in there and play the 60 cents.”

A few days later we went back to the bingo hall to get some answers from the manager.

“Can you tell us anything about the game room over there,” Villarreal asked the Players Bingo Hall Manager.

“I don’t know anything about it,” he answered.

Villarreal followed up, “You’re the one that gave me money last week. Remember?”

“I’m not going to talk to anyone that comes around trying to create a problem for bingo. And that is exactly what you’re doing. That’s how I see the situation from your comment just right off the bat,” Hutchings told us as he jumped in his vehicle and drove away.

In Richardson, we also played $5 inside a game room at Jupiter Bingo. This time we won more than $7. The hall is owned and run by Larry Whittington.

“We don’t take change. And we don’t payout change,” a Jupiter employee explained as she cashed us out.

Larry Whittington runs four bingo halls in the Metroplex and they all have game rooms like the one we found at Jupiter Bingo.

“You’re worker told us this was a slot machine and it paid cash. That sounds like illegal gambling,” Investigative Reporter Mireya Villarreal pointed out.

“No. No. It’s not a slot machine,” Whittington told us. “Believe me, if it was illegal, it wouldn’t be in our bingo hall. The back room is a sweepstakes room. The sweepstakes room is predicated just like a McDonald’s sweepstakes.”

In Texas, Charity Bingo is regulated the by the Texas Lottery Commission and is supposed to benefit non-profit organizations. Whittington says bingo halls and charities have been struggling for years, which is why he brought in this sweepstakes system.

“You told me that you had spoken with Richardson PD and that they were aware,” Villarreal reminded Whittington during their in-person conversation.

“Yes. We sat down and told them exactly what it was,” Whittington explained.

“So, they’re aware that you have these machines,” Villarreal asked.

“Yes,” Whittington answered. “It’s a sweepstakes.”

“Ok,” Villarreal followed up. “And the Lottery Commission is aware that you have these?”

“Oh, yes,” Whittington replied. “Because most bingo halls have something similar to this in bingo halls. Because if they didn’t, they wouldn’t be around. That’s how tight bingo is these days.”

We tried to talk with the State’s Bingo Director, Sandra Joseph, about these games; however, she resigned last week, two days after we uncovered issues with some of the charities being used to play in bingo halls like this across the state.

Richardson Police say they never gave Larry Whittington permission to run those machines out of his bingo hall and pay winners in cash.

“They believe because it’s being touted as a sweepstakes or some other type of game, it’s legal,” Chief Christina Smith noted.

We took our video to Dallas Police Department’s Vice Unitt. Chief Smith says they’ve opened up an investigation based on what we uncovered. But she also warns players looking to make quick cash.

“If the machine is giving you money, then it’s not legal,” Chief Smith clarified.

Fifty miles southeast of Dallas, in Henderson County, District Attorney Scott McKee says he knows all about bingo halls being used as fronts for illegal gambling.

“It is organized crime. Absolutely,” McKee

Back in 2012, McKee’s office worked with the Gun Barrel Police Department to raid the Golden Belle Bingo Hall. Dozens of 8-liner machines and nearly $30,000 in cash were confiscated that night.

“If they’re paying out cash or paying out an opportunity to go out into the bingo hall and play bingo, then under the law it’s illegal,” McKee reiterated.

The non-profit groups playing out of this hall were fined by the state. The hall’s owner agreed to forfeit his bingo license and pay a fine. In exchange, the lottery commission agreed to drop the case against him.

Mckee believes the Golden Belle Bingo case is just the tip of the iceberg.

“These folks are making hundreds of thousands of dollars a month on these big operations with little or no consequences behind it,” McKee said. “And it’s human nature. And some people are willing to take that risk and, if you will, gamble.”

(credit: CBS 11 News)

In 2010 Larry Whittington’s bingo halls were audited and 8-liner gambling machines were found in all four. But the Texas Lottery Commission never notified local law enforcement about what they uncovered. Whittington got rid of those machines and replaced them with this sweepstakes system.

The Texas Lottery Commission’s Media Director Kelly Cripe sent us this statement regarding what we uncovered:

The Texas Lottery Commission’s jurisdiction is limited to enforcing the restriction against unauthorized games of chance during a bingo occasion or on bingo premises. The Commission does not have authority to enforce the criminal laws against illegal gambling devices. Many locations that allow these devices are not associated with bingo, or may not allow the machines to be played during bingo occasions.As I stated in our previous discussions, local jurisdictions across the state enforce criminal laws regarding eight-liners and sweepstakes machines in different ways. As has been covered extensively by media, there is not a consistent statewide enforcement approach among law enforcement authorities, making this an issue for the Legislature to address. The Charitable Bingo Director makes recommendations on particular cases to pursue. Last year, the Commission litigated the Golden Belle case on the issue of illegal eight-liners operated during bingo occasions and entered into settlement agreements with the bingo hall owner and the charities involved. The bingo hall owner surrendered its license and fines were assessed against the charities.At the April 16, 2014 Commission meeting the Commission adopted a rule on Other Games of Chance. The rule makes clear that the agency is to defer to local law authorities to determine whether a particular device is illegal. This determination is fact-specific, depending on how a particular machine operates, and our experience is that different jurisdictions view these machines differently.Sec. 2001.416. OTHER GAMES. (a) A game of chance other than bingo or a raffle conducted under Chapter 2002 may not be conducted or allowed during a bingo occasion.(b) A person authorized to conduct a raffle under this section must be a member of a licensed authorized organization as provided by Section 2001.411.(c) The commission shall adopt rules for the implementation of this section.(d) This section does not prohibit the exhibition and play of an amusement machine that is not a gambling device as defined by Section 47.01, Penal Code.Charitable Bingo is not a “state run program.” Charitable Bingo is regulated by the state through the Charitable Bingo Division.The audit related materials you received, that were sent to Larry Whittington, identified several audit findings including “a game of chance other than Bingo or Raffle conducted under Chapter 2002, was allowed or conducted during an occasion when Bingo was being played.” For many years, the agency has faced conflicting court cases, the awaiting of AG opinions and proposed legislation regarding the handling of this statewide legal issue, and to date, this issue is unresolved at the state level. However, the law has never required this agency to alert local law enforcement authorities to potentially illegal gambling devices.